Purple Pricing back for Northwestern football games

NU sold thousands of seats to last year's game against Ohio State through Purple Pricing.

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Purple Pricing will return to Ryan Field this season.

Sections of single-game tickets to Northwestern's home football games against Nebraska on Oct. 18 and Michigan on Nov. 8 will be sold using the "modified Dutch auction" system the school deployed for two games last season and several basketball games.

Bidding went live this morning on NU's Purple Pricing website, while single-game tickets for NU's five other home games will go on sale at 9 a.m. July 31.

The ticket-pricing strategy, akin to the Orbitz price guarantee model, will apply to nearly 5,000 single-game tickets for both games.

HOW IT WORKS

Prices for the tickets start at an above-face-value premium and gradually come down based on secondary-market demand and other factors until all the tickets sell out or game day arrives. Then, rebates are sent to anyone who paid more than the final price.

NU is letting fans bid for a week to gauge what people are willing to pay before setting that premium price, which will be posted July 31.

For both games, the school is estimating based on previous game data that end zone seats will start between $70 to $100, corner sideline seats between $80 and $120 and goal sideline seats between $90 and $130.

Estimated sideline seat starting prices are $140 to $160 for the Michigan game and $150 to $170 for the Nebraska game.

Each bid costs 10 cents.

SEEKING MARKET VALUE

The goal is to get fans to buy tickets early, giving them the chance to select their desired seat with the assurance that people who wait to see if prices come down won't get a better deal.

In theory, the prices should reflect the real market value of tickets, or what people would otherwise be willing to pay on a secondary ticket site.

There is also a "floor price" that the school won't drop below to make sure they don't erode the benefits of being a season-ticket holder.

The strategy paid off last year for NU, which said it collected 162 percent more money than face value of the tickets sold for its 2013 game against Ohio State.

Fans bought out the allotment of nearly 2,000 sideline seats for that game for $195 apiece, almost triple the previous face value of $70.

NU also pulled in 67 percent more than face value of tickets for its game against Michigan last season and saw revenue increases when it used the system for four basketball games last season as well.

Purple Pricing was the brainchild of Sandeep Baliga and Jeffrey Ely, two economics professors at Northwestern's Kellogg School of Management who specialize in game theory.

With an eye on using a modified Dutch auction to help teams maximize revenue while also learning exactly how much fans are willing to pay to go to games, the pair has since taken their patent-pending algorithm to market through their Evanston-based company, Cheap Talk LLC.

Messrs. Baliga and Ely are pitching their ticket pricing system, renamed "Ticker," to other universities, professional teams and even concert venues.

Fast Company magazine earlier this year named Northwestern's athletic department one of the 10 most innovative companies in sports for 2014 for using the pricing system.

Northwestern kicks off the 2014 football season Aug. 30 at Ryan Field against the University of California at Berkeley.